Prices climbed 0.7 percent on a seasonally adjusted basis from May, the Federal Housing Finance Agency (FHFA) said today in a report from Washington. The average economist estimate was for a 0.6 percent gain, according to data compiled by Bloomberg.
Price increases are drawing more sellers to a market where a tight supply of homes has pushed up values, said Paul Diggle, property economist at Capital Economics Ltd. in London. The inventory of unsold homes was a seasonally adjusted 5 months in June, up from 4.7 months in January, according to data from the National Association of Realtors.
“The current big gains in prices are temporary and they reflect the bounce from the bottom,” Diggle said in a telephone interview before the FHFA report. “They shouldn’t be expected to continue at that pace that much longer.”
Diggle’s firm projects that price gains will slow to 4 percent for 2014, down from 8 percent this year.
Higher mortgage rates may be encouraging buyers to complete deals before borrowing costs rise further. Sales of previously owned U.S. homes climbed 6.5 percent last month to the fastest pace since November 2009, the National Association of Realtors reported yesterday. The median price jumped to $213,500, up 13.7 percent from July 2012.
The FHFA’s report showed prices increased 17 percent from a year earlier in the Pacific area, which includes California and Washington. In the Mountain region, including Nevada and Arizona, the gain was 11 percent. The Middle Atlantic area – New York, New Jersey and Pennsylvania – had the smallest increase, at 2.5 percent.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide a specific price for homes.
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